CAW offers wage, pension changes for new hires

Reuters Staff

2 Min Read

TORONTO (Reuters) - The Canadian Auto Workers union has offered the Detroit 3 automakers concessions on wages and pensions for new hires, a senior union official said on Thursday, as pressure builds to reach a deal ahead of a deadline early next week.

CAW National Secretary-Treasurer Peter Kennedy said the union has proposed a lower starting wage for new hires, and a longer “earn-in,” the time it takes to reach the top of the pay scale. But workers would still eventually reach the same pay as existing employees.

“The important thing is that over time they would grow into the prevailing rate, so that we wouldn’t have a permanent two-tier system,” said Kennedy.

On Monday, a union source close to the talks said it might be possible to extend the earn-in from the current six years to as long as 10 years. Kennedy said he did not want to talk specifics.

The CAW has threatened to strike against Fiat SpA’s Chrysler FIA.MI, Ford Motor Co (F.N) and General Motors Corp (GM.N) simultaneously if it does not reach a contract agreement with at least one company by its strike deadline at 11:59 p.m. Eastern on September 17 (0359 GMT, September 18).

Kennedy said the union has also presented a new pension plan for new hires. New workers would contribute to their pensions - current employees do not - but would still be entitled to a defined benefit, not a defined contribution pension.

Also on pensions, Kennedy said the union could relax the “30-and-out” provision for new hires. Instead of being allowed to retire after 30 years under any circumstances, they would be able to retire after 30 years only if they were above a particular age.